End of road for Falcon and Commodore in 2016

The two icons of the Australian car industry – the Ford Falcon and Holden Commodore – are almost certain to be phased out within months of each other at the end of 2016, marking the end of a battle that has lasted more than half a century.

Ford has said for some time the future of the Falcon and its Broadmeadows manufacturing facility are not guaranteed beyond the end of 2016. Overnight at the Detroit motor show, Holden inadvertently confirmed the Commodore’s run is due to come to an end about the same time.

In an interview with Australian journalists the boss of Holden Mike Devereux said: “VF [Commodore] will run through to the end of 2016. We have a current plan to put a second [vehicle type] into the plant before 2017.”

News Limited understands Holden has started plans to build a medium-size, four-cylinder, front-drive car alongside the next generation Holden Cruze from 2017. But given the continuing strong growth in sales of SUVs, which are now the second biggest market in Australia, Holden said it may re-evaluate its position.

“We have a plan that we signed with the government of Australia that does define two architectures [vehicle types]. Could we change the second one if things continue to change? Yes we could.” But Devereux would not confirm or speculate on what the second vehicle would be alongside the Cruze.

“VF [Commodore] will run into 2016 and if I had my druthers, I wouldn’t want anyone knowing or having an inkling over what that second architecture was until almost the end of VF production,” he said.

He said the contract that Holden signed with the government in April 2012 could be amended to build another type of car – providing it meant it would sell in higher numbers.

“If we did change what we’re going to build the only reason we’d be changing it is because we thought we could [sell] more,” Devereux said. “I think the Prime Minister and the Industry Minister of Australia, if we had a better plan, would certainly want to look at a better plan.”

Devereux said Holden was re-evaluating SUVs after their record growth last year; they now represent about one-third of new-car sales – but, siginificantly, none are among the top 10 sellers.

“We’re taking a look at and making sure we don’t make the wrong decision,” Devereux said. “[But] there is not an intention to change.

“If you asked me a year ago if [sales of] SUVs would go up 27 per cent, I would have been surprised by that level of growth. But the challenge with an SUV is that there are so many of them.”

He said Holden had to pick “two winners”. "They’ve got to be Top 10. There isn’t any room to pick an entry that isn’t a top-selling, well-loved vehicle in Australia. It’s high stakes no question.”

There may be one silver lining on Holden’s cloud. If the Australian dollar weakens and demand for the Holden-made US police car increases, it has room at the factory to continue to build the Caprice limousine and Holden Commodore ute alongside the two other models. But Holden says it has not yet explored this option and it is not part of the current plan.

Ford has not revealed its plans beyond 2016 however it has all but run out of options. It has already ruled out a small car, an SUV and a ute -- vehicles which would compete in the three biggest market segments in Australia, but come to Ford from factories in Thailand.

Another type of locally made Ford vehicle that could be exported is highly unlikely given the sustained strength of the Australian dollar. Parts suppliers in Australia believe Ford will close its manufacturing operations at the end of 2016 because they have not been asked to quote on future models.

Late last year Ford shut three long-standing factories in the UK and Europe as it matches falling demand there. It also shed thousands of jobs and up to 17 factories in the US after the GFC. In 2012 - a record sales year - Ford Australia produced its lowest annual output since Broadmeadows opened in 1960.